Life insurance question???

Question

Will my mother have to pay taxes on my dad's life insurance policy when he dies?

Answer 1

No she won't have to pay taxes and IT DOES NOT matter if the estate is the beneficiary if the wife gets the proceeds anyway...at least as far as the life insurance is concerned for her.  It's not the best planning, but it still doesn't matter, because if he owns the policy the proceeds are already in his estate regardless of who the beneficiary is.

Answer 2

The agent has the best answer and the correct one.

Make sure the beneficiary is your mother and you should also have a contingent beneficiary listed in case something happens to your mother then the proceeds would go to the contingent beneficiary.  

You never know what can happen and sometimes the first beneficiary can die before the named insured or soon after that.   Don't take a chance and name a contingent beneficiary just to be safe.  Don't name the estate as beneficiary name an actual person.  But since every  situation is different you should consult with a financial planner but that is my opinion is what I suggested above.

Answer 3

Life Insurance payouts are free.

Answer 4

Life insurance benefits are one of the few things left untouched by the tax man in this country.  You can read all about it at http://www.lvhealthins.com

Answer 5

Is she beneficiary?  

If she's beneficiary of the  policy, no.  If his estate is the beneficiary, it becomes part of his estate, subject to estate taxes.

Answer 6

There is no income tax due on life insurance death benefits.  Even IF your father's estate was large enough to be subject to estate taxes, there is an unlimited spousal deduction.  If you have more specific questions, seek the help of an accountant.

edit: Ownership, not beneficiary, is the litmus test for estate taxes.  Beneficiary just dictates who gets the death benefit.

Answer 7

no,insurance refund are taxfree

Answer 8

there is no income tax or inheritance tax on life insurance.